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Report Indicates ’10 Concerts’ Facebook Trend Could Compromise Your Internet Security – Complex

April 29, 2017 | Author: admin

The New York Times often takes an analytical look at trends, and when the NYT speaks, the country listens. The subject of todays analysis: the recent popular 10 concerts post train on Facebook.

The premise is simple: users post 10 concertsnine of which they have attended, one of which is a lie. It seems innocuous enough. But the Times is reporting that engaging in this trend could pose a threat to your online security.

Does this sound like theyre taking it way too seriously? Maybe. But the case holds some weight when you consider the following: Privacy experts cautioned it could reveal too much about a persons background and preferences and sounds like a security questionname the first concert you attendedthat you might be asked on a banking, brokerage or similar website to verify your identity, according to the report.

In other words, if you have this as a security question, and you continue the Facebook trend, you might get hacked and lose all your money.

Michael Kaiser, executive director of the National Cyber Security Alliance, added another point: the list could reveal personal information that target marketers will use to reach you with their products. Pretty creepy.

You are expressing things about you, maybe in more subtle ways than you might think, Kaiser said.

The experts interviewed by the Times recommended being hyper-vigilant and maybe even a little paranoid.

People always have to have their eyes wide open when theyre on the internet, Kaiser said. Its the way of the world.

This might be an overreaction, for sureit might sound a lot like your mom lecturing youbut at least its something to consider before posting about those 2 Chainz and Drake concerts you hit up last year. The more you know.

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Report Indicates '10 Concerts' Facebook Trend Could Compromise Your Internet Security - Complex

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NSA To Limit Some Collection Of Internet Communication – NPR

April 29, 2017 | Author: admin

The National Security Administration (NSA) campus in Fort Meade, Md. Patrick Semansky/AP hide caption

The National Security Administration (NSA) campus in Fort Meade, Md.

The National Security Agency is scaling back the way it spies on some communications over the Internet.

The NSA says it discovered what it called "lapses" in compliance with U.S. law.

They're called "about" communications: The NSA not only watches messages traveling to and from a foreign target, but those that mention one.

That can mean the NSA sometimes sweeps up data from Americans without a warrant. In the past, officials said the spy agency was still mindful of citizens' privacy.

But now NSA says it has discovered "several inadvertent compliance lapses," which it reported to Congress and a secret court that oversees intelligence gathering.

There aren't many more details, but the NSA now says it will, quote, "stop the practice to reduce the chance that it would acquire communications of U.S. persons or others who are not in direct contact with a foreign intelligence target."

Here's the full statement from the NSA:

NSA Stops Certain Foreign Intelligence Collection Activities Under Section 702

The National Security Agency is instituting several changes in the way it collects information under Section 702 of the Foreign Intelligence Surveillance Act.

Section 702, set to expire at the end of this year, allows the Intelligence Community to conduct surveillance on only specific foreign targets located outside the United States to collect foreign intelligence, including intelligence needed in the fight against international terrorism and cyber threats.

NSA will no longer collect certain internet communications that merely mention a foreign intelligence target. This information is referred to in the Intelligence Community as "about" communications in Section 702 "upstream" internet surveillance. Instead, NSA will limit such collection to internet communications that are sent directly to or from a foreign target.

Even though NSA does not have the ability at this time to stop collecting "about" information without losing some other important data, the Agency will stop the practice to reduce the chance that it would acquire communications of U.S. persons or others who are not in direct contact with a foreign intelligence target.

Finally, even though the Agency was legally allowed to retain such "about" information previously collected under Section 702, the NSA will delete the vast majority of its upstream internet data to further protect the privacy of U.S. person communications.

The changes in policy followed an in-house review of Section 702 activities in which NSA discovered several inadvertent compliance lapses.

NSA self-reported the incidents to both Congress and the FISC, as it is required to do. Following these reports, the FISC issued two extensions as NSA worked to fix the problems before the government submitted a new application for continued Section 702 certification. The FISC recently approved the changes after an extensive review.

The Agency's efforts are part of its commitment to continuous improvement as we work to keep the nation safe. NSA has a solemn responsibility and duty to do our work exactly right while carrying out our critical mission.

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NSA To Limit Some Collection Of Internet Communication - NPR

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As Journalists Seek Encryption, SecureDrop Proves a Challenge – Folio Magazine

April 29, 2017 | Author: admin

A look inside the anonymizing software protecting sources across the magazine industry.

If you want to reach Thomas Fox-Brewster, you'dbest be prepared to download new software. In his Twitter bio, Fox-Brewster a security reporter forForbes lists a series of codeswhich will allow anyone with a tip to covertly reach out through an encrypted channel.It might seem inconveniently picky, even a potential obstacle to reaching sources, but Fox-Brewster is among the growing ranks of journalists who have ditched insecurecommunication techniquesin favor of toolslikeSignal and Ricochet.

Encryption has become increasingly commonfor journalists hoping to get the next big story by ensuring sources that their identities stay secret while their secrets go public.There are many options to choose from, some open source and others proprietary, with no consensus on any standard. This leavesnewsrooms to fend for themselves as they try to protect people with secrets without making it too difficult for such whistleblowers to come forward.

Last Thursday,Wiredbecame the latest magazine to publicize its use of SecureDrop, which allows whistleblowers and leakers to anonymously send documents and messages to media organizations without identifying or traceable information. This comes one month afterForbesadopted the program, and four years afterThe New Yorkertook the technology public.

Compared toapplications like Signal and Ricochet, which are used in conjunction with smart phones and personal computers,SecureDrop might be the most secure way to leak documents. But its set up is complex and its yield so far has been low a steep consideration as some news organizations spend up to $3,000 in new hardware, and $10,000 in support contracts with the Freedom of the Press Foundation, which manages the SecureDrop project.

"SecureDrop can be a little bit intensive,"Harlo Holmes, director of newsroom digital security at the Freedom of the Press Foundation, tellsFolio:.Source protection is really difficult to begin withThis is one way that is addressing that problem head on.

THE MOTHER OF INVENTION

SecureDrop was first conceived in 2011 byfamed programmerand activist Aaron Swartz at the request of Kevin Poulsen, an editor atWired.

"Theres a growing technology gap: phone records, e-mail, computer forensics, and outright hacking are valuable weapons for anyone looking to identify a journalists source,"Poulsenwrotein 2013."With some exceptions, the press has done little to keep pace: our information-security efforts tend to gravitate toward the parts of our infrastructure that accept credit cards."

The tool has seen a resurgence since the election of President Donald Trump, who has publiclythreatenedto prosecutegovernment employees who leak documents to the press. However, the origins of SecureDrop harken back to WikiLeaks and Obama-erastrong-armingby the Department of Justice to get journalists to identify confidential sources.

With SecureDrop, theres nothing to identify. Journalists are as ignorant of their sources as the Department of Justice itself. While this creates its own issues in terms of authentication, it frees up reporters from external pressure to reveal sources. This is in contrast to a phone call, which can be tapped or traced through phone companies, or apps like Facebook Messenger;Facebookis explicit in its willingness to reveal the content of messageswhen faced with a valid search warrant.

In an age of pervasive internet surveillance, traditional tools like email and phone calls are no longer enough to safely link reporters and their contacts. The most sensitive sources need a more secure channel, one thats encrypted and anonymous by default, senior writerAndy Greenberg wrotein last week'sannouncementaboutWiredadopting SecureDrop.

A SLOW START

The New Yorkerwas the first magazine to publicize its use of the system in 2013, then under the name Strongbox. Its since been followed byThe Intercept,ProPublica, andThe New York Times publications known for their extensive investigative reporting.The Nationwill alsojoinlater this year.

While many publications embrace the publicity as a means of coaxing tipsters, others prefer to keep their use, well, anonymous. The perils of an open inbox might include an influx of bizarre messages, or in the case ofThe New Yorker, endless poetry and cartoon submissions, according to Holmes.

Michael Luo, editor of NewYorker.com and a former investigative editor atThe New York Times, says that while hes a big fan of the system, it has yet to pay off. Eric Lach, the sites deputy news editor, checks the system every few days, but it hasnt led to any stories.

Were certainly getting tips, but nothing incredibly useful, Luo tellsFolio:.Why is that? I guess I feel like, at this point,The New Yorkeris not necessarily the front-of-mind outlet for those kinds of leaked documents and data, in the way thatThe TimesandProPublica, for example, are.

Elsewhere in the mediasphere, however, stories are trickling in. Last week, Vices Motherboardpublished a storyabout people who spy on their loved ones, informed by data obtained through SecureDrop. In February, Gizmodopublished a recordingof Trump discussing trade tariffs with Wilbur Ross, a then-nominee for Secretary of Commerce.

The proposals came during an apparent phone conversation that was captured on video and provided to Gizmodo via SecureDrop, a portal permitting whistleblowers and sources to reach us while remaining anonymous, the article reads.

INSIDE THE MACHINE

One of the difficulties withSecureDrop is that it requires more work on behalf of the source than just downloading an app, or picking up a phone.

To discreetly share documents or messages with a participating newsroom, tipsters must download Tor, a software program which allows users to circumvent existing tracing mechanisms that reveal location and other information. Tor is best known as an entry port for the Dark Web a difficult-to-access set of websites which sometimes facilitate illegal activities, such as the hiring of hitmen.

Not everyone seeking anonymity is a murderer, however. Tor is often seen as the best bet for sources inside the government or corporations who wish to share information which is of public interest, but puts the source at risk in their personal or professional lives.

Sources are given a random code name which acts as a passcode. They can use this name to reaccess messages at a later date. This code name is different than the name that appears for the journalists on the other side.

For the newsroom, however, things aremore difficult to set up. The Foundation combats this flaw with a sliding pay scale for technical support and training. We know that not every news organization that wants to support public interest journalism is going to be as well funded asThe Washington Post,says Holmes.

For-profit institutions are asked to pay $10,000 for a year of support, which covers installation performed in office by Freedom of the Press Foundation staff the training of journalists and IT, and the set up of a SecureDrop landing page, in accordance with the Foundations best practices. This contract also covers ongoing support.Media organizationsare expected to pay the Foundation's travel expenses as well.

Since SecureDrop is open source (and therefore free), newsrooms can conceiveably set up the system themselves, even using repurposed hardware. For these companies, the Foundation offers a year of support and training for $5000.

While it doesnt matter which specific hardware is used, the Foundation provides recommendations in the range of $2000$3000 per set up.

A fully functioning newsroom setup requires a server to run the application itself; a server to monitor the health of the first server; a dedicated firewall to keep SecureDrop separate from the rest of the newsrooms traffic; computers with the operating system Tails, on which the reporters can view the documents securely; a separate computer generally well-guarded which hosts a user interface on which a specific set of editors (usually only one or two) can review submissions; and USB sticks to transfer the documents from the well-guarded computer to the viewing station, and from the viewing station to a normal computer, where the journalist eventually prepares the documents for publication.

SecureDrop is notoriously challenging to use and takes dedication within a newsroom to check it diligently and respond. But its pretty good now for what weve got, and its only going to get better, Holmes says.

Though SecureDrop was built by and for the magazine industry, several other pieces of software are popular with journalists due to their differing levels of security and ease of use.

Signal

Signal is a secure call and messaging app, run by volunteers and grant-funded programmers under the moniker Open Whisper Systems. Its open source and free to use.

Signal is like WhatsApp for the fearful. Users download an app, which then uses the phones existing number and contact book. All messages are encrypted on both sides, which means that Open Whisper Systems cant see your messages, though communication is not anonymous between users. The good news is, with end-to-end encryption, Open Whisper Systems has nothing to share with law enforcement should they request message transcripts.

Ricochet

Ricochet is a machine-specific instant messaging system which operates through Tor. The free and open-source software isencrypted end-to-end, and anonymized, which means your computer does not know where the messages are coming from.

Contacts are added through a specific serial code which is visible and shareable with other users. However, contact relationships are device specific and dont run through servers or networks.

Open PGP

Open PGP (Pretty Good Privacy) is a non-proprietary email encryption software which can be used in conjunction with Windows, Mac and Android mailbox tools, as well as many others. Like the other services, Open PGP uses end-to-end encryption, which makes it difficult for emails to be read if they are intercepted.

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New Mexico Enacts Data Breach Notification Law; Tennessee Reinstates Encryption Safe Harbor – The National Law Review

April 29, 2017 | Author: admin

Sheila A. Millar counsels corporate and association clients on advertising, privacy, product safety, and other public policy and regulatory compliance issues.

Ms. Millar advises clients on an array of advertising and marketing issues. She represents clients in legislative, rulemaking and self-regulatory actions, advises on claims, and assists in developing and evaluating substantiation for claims. She also has extensive experience in privacy, data security and cybersecurity matters. She helps clients develop website and app privacy policies, data security and access procedures, manage trans-border data flows, respond to data breaches and create training programs. She assists clients on digital media issues, helping them develop social media, blogging and user-generated content policies, and to understand advertising technology and online behavioral advertising issues. Ms. Millar also works with clients to navigate the array of federal and state requirements governing contests and sweepstakes, and advises on gift cards, coupons and rebates. She represents clients on advertising and privacy matters before the Federal Trade Commission (FTC), the Childrens Advertising Review Unit (CARU), the National Advertising Division (NAD), as well as in connection with investigations by state regulatory bodies and Attorneys General.

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Summary: pitfalls of paper wallets : Bitcoin

April 29, 2017 | Author: admin

Creating paper wallets:

Problematic action: Create a paper wallet on a paper wallet service website without disconnecting from the internet. Reason: It's extremely insecure for many reasons, some being 1) the website is hacked with generated private keys sent to the hacker; 2) there may be malware in the browser or in the operating system that sends the private keys to the hacker. Solution: The bottom line is to disconnect the internet before creating the paper wallet. It's not secure enough because 1) the malware can save the private keys and wait for internet connection to send them out; 2) the malware can interfere with the generation process itself and give you a private key that is already known to the hacker, which is called backdooring the random number generator; 3) the private keys may exist on the hard disk therefore may be extracted by malware or after the computer is disposed. Better solution: Use a live operating system, such as a Ubuntu live CD, to run the paper wallet software. This is not ultimately bullet-proof, especially for high-value targets, because there exist malware that can hide in the BIOS and firmware of your computer and can infect your live operating system. It should be secure enough for average Joes.

Problematic action: Create a paper wallet without serious verifying. Reason: There may be incompatible issues with operating systems and browsers. Solution: Run tests on various operating systems and various browsers before putting BTC in. Make sure the generated private keys are identical. This applies to regular paper wallets and BIP38 paper wallets. Make sure the decrypted BIP38 keys are correct.

Problematic action: Use a wireless printer. Reason: It's insecure because wireless networks are insecure. Solution: Use a wired printer.

Problematic action: Use an advanced printer, which has internal storage, such as a hard drive. Reason: It is insecure because the private key of the paper wallet printed may be stored on the internal storage, therefore may be recovered if the printer is sold or scrapped. Solution: Use a dumb printer. Or smash the printer, including and especially the internal storage, or keep it locked up and never sell or scrap it.

Problematic action: Leave the printer open for other people to access after printing without turning it off. Reason: It's insecure because the private key printed may still be in the memory of the printer. Solution: Turn the printer off after printing.

Problematic action: Leave the computer untreated after printing. Reason: It's insecure because the printer driver and/or operating system may be keeping copies of the documents you print in some sort of "spool" or print queue. Solution:

Quote from https://bitcoinpaperwallet.com/#popupDelete (the popup doesn't work).

Macintosh:

Enable 'FileVault' to encrypt your filesystem so that cache files cannot be 'undeleted'. Set up a symbolic link from /private/var/spool/cups/cache/ to a removable media volume (e.g. a SD card) and disconnect it when not in use.

Windows:

Use an encrypted filesystem so that your cache files cannot be 'undeleted'. Read this FAQ on how to change the destination of your cache (spool) files to removable media.

Linux:

Use a live-boot CD instead of a regular hard drive OS install. This way when you reboot your computer, all cache files are deleted from memory and no jobs are ever written to disk.

Problematic action: Use a shared printer (at work or school, for example). Reason: It's insecure because 1) the printer may have a glitch and someone else may get your printouts; 2) the printing jobs may be centrally logged. Solution: Don't. Use your own printer.

Problematic action: Use a printer to print the private key or the QR code of the private key. Reason: See above. Solution 1: Don't use a printer for private key stuff. Hand-write the private key. Ignore the QR code since hand-drawing the QR code of the private key may be too time-consuming. Double check. Then check it again, preferably on a different day. Get someone you trust to check it. Then get him/her to check it again, preferably on a different day. (Testing the private key in a wallet app can make it sure. But it comes with risks.) Solution 2: Don't use a printer for private key stuff. Use brain wallet. Write down the passphrase and the relevant information, e.g., the name of the tool used (bitaddress.org/WarpWallet/etc.) and the instructions. Store it the same way as a paper wallet. Save and store some copies of the tool, in case the future versions become incompatible. (There are pitfalls for creating man-made passphrases. It is beyond the scope of this post. In a nutshell, don't create passphrases with your brain.)

Problematic action: Import a paper wallet private key into a wallet app, then spend directly from the paper wallet address.

Mistake: Expect the paper wallet automatically receives/holds changes, similar to a real-life wallet, which may not be the case. Reason: Early wallet apps didn't handle the changes correctly. The changes became the transaction fees of the miners. Explanation: It's a misunderstanding of how Bitcoin works. There is no account balance of any kind in Bitcoin. There is only Unspent Transaction Output (UTXO). The receiving addresses of changes, which will become the new UTXOs, must be specified when BTC is spent. Otherwise, the changes will become the transaction fees. This depends on the implementation of the wallet app, which should not be trusted.

Mistake: Think nothing is wrong if changes are handled correctly. Reason: It's called address reuse, which is not recommended in Bitcoin because 1) it reduces anonymity of both the sender and all the consecutive receivers; 2) it reduces the security by exposing the public key, which is vulnerable to quantum computing. Addresses are hashes of public keys, which are safe from quantum computing.

Mistake: Destroy the paper wallet after it's imported into an HD wallet, thinking that it has become a part of the HD wallet and it's safe to destroy because the master seed of the HD has been backed up. Reason: It is not a part of the HD wallet. If the paper wallet (the paper) is destroyed and the app is uninstalled, the BTC is gone even if the HD wallet is recovered from its master seed.

The right way: Spend (transact) all BTC in a paper wallet to an address of your wallet app. Spend BTC from there. After all the spending is finished, create a new paper wallet and transact all the remaining BTC to it. Store the new paper wallet. Keep the old one for future reference, or destroy it if you don't want the trace.

Problematic action: Destroy a paper wallet after it is used. Reason: You may need to prove you had control of that address some day, e.g., for taxation purpose. In the case of a chain split, you may have a balance on the other chain. Solution: Don't ever destroy a paper wallet. Keep it on file. Mark it with the relevant information, e.g., "Used in April 2017". Unless you don't want to be tied to the address.

Problematic action: Google a famous wallet app, click the first link or the sponsored link, download/install it, and use it, without serious research. Reason: It's insecure because the wallet app may be a scam. Solution: Do thorough research prior to deciding which wallet app to use. Find the official site prior to downloading/installing it.

Additions and corrections are welcome.

Edit: multiple editing for additions, corrections, and clarifications.

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Here’s Our Take On Bitcoin Investment Trust (OTCMKTS:GBTC) – Insider Financial

April 29, 2017 | Author: admin

Whatever anyone thinks about the digital currency space, and in particular bitcoin and the blockchain, its becoming impossible to ignore. The price of bitcoin is at or near all term highs against the USD and other majors, and the digital currency has a market capitalization in excess of $21 billion. Take the digital currency space as a whole, and this market capitalization rises to more than $30 billion a threshold that was just crossed this week.

Thats more than twice the value of Twitter Inc (NYSE:TWTR).

Its still an incredibly tough space against which to pick up an exposure, however. For someone that doesnt want to buy bitcoin itself, there just arent that many options available that offer direct exposures to the rise and fall in the digital currencys value. Sure, there are a few publicly traded companies that operate in the bitcoin ecosystem weve covered some of them here at Insider Financial in recent weeks but these are indirect exposures at best, and some are fraught with risk factors not-inherent to the currency itself.

There is one, however, that looks to offer about as direct an exposure as a trader or investor can hope for, without having to set up a bitcoin wallet.

The stock is Bitcoin Investment Trust (OTCMKTS:GBTC).

Bitcoin Investment Trust is a cryptocurrency-focused investment vehicle backed by Glenn Hutchins, a co-founder of private-equity firm Silver Lake, and its operated by an entity called Grayscale (well come back to this shortly). Shares in the Trust track the bitcoin market price, less fees and expenses, and in doing so, allow for a pretty accurate (in terms of rising and falling with the underlying bitcoin price) exposure to bitcoins appreciation.

Some readers might have caught the attempt (and resulting failure) by the Winklevoss twins last month to get a bitcoin based ETF past the SEC. The Commission wasnt having it (stating uncertainty associated with the fact that many bitcoin companies are based outside the US), and that decision is now under appeal.

Grayscale is trying to follow up with its own ETF (which it sees Bitcoin Investment Trust developing into) and theres a decision pending with the SEC, set for announcement on September 22. Some suggest that the fact that this ones already traded on a public exchange strengthens its chances. Nobody really knows. One thing we do know, however, is that GBTC is running up, and is up more than 11% across the last few days alone. Why? Because bitcoin is running up in parallel.

If bitcoin continues to run, therefore, we expect this one to run further. Will bitcoin continue rising? Near term probably. When the digital currency reaches highs, mainstream media generally picks up on the fact, and draws speculative dollars towards the space on the added coverage. These speculative dollars boost price, and this should in turn boost the value of Bitcoin Investment Trust.

We said wed come back to Grayscale, so lets do that.

Theres some concern over the ownership of Bitcoin Investment Trust, and how this ownership might play into the SECs decision come September. Basically, Grayscale is owned by an entity called Digital Currency Group, or DGC, and DGC is also the owner of the industrys leading news outlet a website called Coindesk. Some feel that this affiliation will cause concern for the SEC as to a potential conflict of interest, and that this might make Bitcoin Investment Trusts efforts to relist as an ETF un-approvable.

Theres some credence to this, but its one of those things theres no real way of us knowing.

Right now though, it doesnt matter too much. Weve pegged this one as a near term runner as it gains to mimic the underlying price advance well likely see as bitcoin hits the headlines in popular news/media.

We will be updating our subscribers as soon as we know more. For the latest updates on GBTC, sign up below!

Disclosure: We have no position in GBTC and have not been compensated for this article.

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Cryptocurrency and taxes – thetaxadviser.com

April 29, 2017 | Author: admin

About 10 to 15 years ago, the IRS began serving "John Doe" warrants to foreign banks to compel those banks to release the names of account holders on certain bank accounts. This was followed by a tough crackdown by the Service on taxpayers who failed to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), which certain foreign bank account holders are required to file (and face stiff penalties for not filing, including jail time).

On Nov. 30, 2016, a federal judge in the Northern District of California granted an IRS application to serve a John Doe summons on Coinbase Inc., which operates a virtual currency wallet and exchange business (In re the Tax Liabilities of John Does, No. 3:16-cv-06658-JSC (N.D. Cal. 11/30/16) (order granting ex parte petition)). This was done under the authority of Sec. 7609(f):

(f) Additional requirement in the case of a John Doe summons: Any summons . . . which does not identify the person with respect to whose liability the summons is issued, may be served only after a court proceeding in which the Secretary establishes that

(1) the summons relates to the investigation of a particular person or ascertainable group or class of persons,

(2) there is a reasonable basis for believing that such person or group or class of persons may fail or may have failed to comply with any provision of any internal revenue law, and

(3) the information sought to be obtained from the examination of the records or testimony (and the identity of the person or persons with respect to whose liability the summons is issued) is not readily available from other sources.

Coinbase, a digital asset exchange company headquartered in San Francisco, operates exchanges of bitcoin, Ethereum, and other digital assets with currencies in 32 countries and bitcoin transactions and storage in 190 countries worldwide. The summonses asked Coinbase to identify all United States customers who transferred convertible virtual currency from 2013 to 2015. At that point, Coinbase dealt only with bitcoin.

Coinbase is not the only medium for trading cryptocurrencies. Largely, cryptocurrency has gone unregulated, so these warrants are issued to level the playing field for the government. The author believes that Coinbase is just the first of many IRS targets.

Cryptocurrency transactions

Why would the IRS care about cryptocurrency? For two reasons:

I was the tax consultant for the largest fund of cryptocurrency a few years ago before it disbanded. The way this fund made money was by converting U.S. dollars or euros into bitcoin. Then the bitcoin was converted to another cryptocurrency, and then another, and so it went. All of these transactions were tracked and made public using blockchain, which is a digital ledger in which transactions made in bitcoin or other cryptocurrencies are recorded chronologically and publicly. Each conversion is a taxable transaction.

It is easiest to think of cryptocurrency as a commodity, such as gold and platinum. Let's say an investor buys an ounce of gold and then converts the gold to platinum. That would be a taxable event. Gold has a dollar value and platinum has a dollar value, with the difference being taxable. Just like any currency or commodity, the cost of one unit of any cryptocurrency changes by the second.

For example, let's say a person bought $200,000 worth of bitcoin. His or her basis in the bitcoin would be $200,000. That number of bitcoin can either be converted into other cryptocurrencies or be used to pay for goods and services. In 2013, only a few large retailers would take bitcoin for payment. That number has since exploded to several thousand.

Miners, traders, or investors access their virtual currencies through a wallet, which is the bitcoin equivalent of a bank account. The wallet enables virtual currency owners to receive the virtual currency, provides storage for them, and enables the owner to send them to other wallets. There are two main types of wallet. The first is a software wallet, which virtual currency owners install on their computer or electronic device. This type of wallet gives the owner total control, yet it can be challenging to download and maintain. The second type, the web wallet (or hosted wallet), is hosted by a third party, and while it is easier to use, a certain trust must be placed in the provider to ensure the coins are protected.

Once a wallet is set up, the virtual currency owner then has an address that looks something like this: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2.

After the wallet's owner chooses a password, by the way, there is no way to change it, which makes it imperative that the owner write down the password and secure it in a safe location. A client of the author lost $250,000 because the safe where he kept his wallet address and password was sent to an incinerator. A wallet's owner has no way to access the wallet without the string of letters and numbers and the password.

IRS takes notice

In response to concern over virtual currencies and their perceived potential for evading taxes, the IRS issued Notice 2014-21 in March 2014. This notice gave guidance on everything from paying employees with cryptocurrency to how the various trades between different currencies are treated.

But in a 31-page report from the Treasury Inspector General for Tax Administration, released Sept. 21, 2016, the IRS basically admitted that though a Virtual Currency Issue Team had been created, guidelines for compliance had not been developed. The recommendations from this report included developing a coordinated virtual currency strategy, providing updated guidance for requirements and tax treatments, and revising third-party reporting requirements and documents.

Another problem that the IRS has had with virtual currencies is that the transactions by miners, traders, or other investors are not currently reported on any tax forms. For instance, investors who trade foreign currency on the Forex (a foreign exchange site) are sent tax forms for all of the trades made on the platform. However, cryptocurrency exchanges do not currently issue Forms 1099 for transactions within the platforms.

As touched on earlier, cryptocurrency could conceivably be used for money-laundering activities. Unlike money issued by governments, cryptocurrency has no Federal Reserve, no gold backing, no banks, and no physical notes. Thus, it has the potential for being used in illegal activities. A criminal could simply convert "dirty money" gained through an illegal activity to something like bitcoin and use it to trade for goods and services.

Coinbase summonses

In response to the possibility that cryptocurrency users could be using their accounts for illicit activities or to evade tax, the IRS issued a John Doe summons to Coinbase asking for information about all of its customers from Jan. 1, 2013, to Dec. 31, 2015. According to the IRS, in a filing in support of the summons request, an IRS agent attested to the fact that he had uncovered two taxpayers who admitted that they disguised the amounts they spent purchasing bitcoins as deductible technology expenses (Erb, "IRS Wants Court Authority to Identify Bitcoin Users & Transactions at Coinbase," Forbes (Nov. 21, 2106)). The estimated number of Coinbase's customers during the period the summons covers could be "massive," according to Forbes.

As cryptocurrency has evolved, the IRS has had to play catch-up with the miners and others trading on this platform. The John Doe warrants are just the beginning of this enforcement process for the IRS.

Craig W. Smalley, MST, is an enrolled agent and the founder and CEO of CWSEAPA PLLC, which provides accounting and financial services.

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Ripple Rising: Centralized Cryptocurrency Sees 30% Gain in One Day – CryptoCoinsNews

April 29, 2017 | Author: admin

Bank-friendly Ripple (XRP) still exists, to the surprise of many, the author included. Not only that, but it has continued its apparent strategic partnership initiative, partnering with Asian and Australian banks in conjunction with its stated goal of acting as a sort of Paypal mechanism for large interbank transfers.

Four short weeks ago, the coin was sitting around a penny a pop. But with more enthusiasm building among traders, it has steadily risen, and today saw a spike of over 30%, rounding out just under 5 cents each.

Ripple has been getting a ton of attention as of late, and not the negative kind like it once received for managing to get a $700,000 fine from the federal government and thereby underscoring the risk of having a known entity backing a cryptocurrency. Just a couple of examples of this are this recent video in Bloomberg News and inclusion in a Bank of England program.

Skepticism among more traditional cryptocurrency people still thrives. The centralization aspect and the inherent issue of being able to identify coin users as well as reverse transactions certainly is a specter of wrongdoing for many of us. But as one writer put it, one mans sh**coin is another mans treasure.

The fact that the Ripple project has continued to develop its platform and strategic partnerships, continued to bring on talent, and continued to grow its community means that they are at least serious, not scammers looking for a quick buck. The Paypal of banks aspect is important, and paralysis in the Bitcoin community over a simple issue certainly gives any bank pause when it comes to partnering with cryptocurrencies. A recent report from IBM shows that over 90% of banks are investing in some form of blockchain technology.

Another factor of improvement for Ripple is the unofficial Swiss sector of its network. Something called PathShuffle has been introduced which aims to anonymize transactions in the same way that they are on the likes of the DASH network.

Blockchain and cryptocurrencies are both very young technologies, and the future is wide open. The first mover, Bitcoin, continues to have its share of problems, and as its drama continues it becomes easier and easier to envision a future where alternatives actually stand a fighting chance. The recent, impressive success of Ethereum is one example, along with DASH, and perhaps Ripple will be up there with them, centralized though it is, serving its own corner of the market.

Featured image from Shutterstock.

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Daily Report: Cloud Computing Asserts Itself – New York Times

April 29, 2017 | Author: admin

New York Times
Daily Report: Cloud Computing Asserts Itself
New York Times
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Daily Report: Cloud Computing Asserts Itself - New York Times

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Microsoft CEO Satya Nadella outlines its cloud computing strategy for Wall Street – GeekWire

April 29, 2017 | Author: admin

Satya Nadella speaks at Microsoft Ignite 2016 (Photo by GeekWire/Kevin Lisota)

Microsoft is a huge multinational technology company, with lines of business spread across PCs, productivity software, gaming, internet search, and more. But after its third fiscal quarter earnings report came out yesterday, financial analysts spent most of their time asking about a very specific business.

Questions about Microsoft Azure and associated cloud services dominated Microsofts financial results call yesterday afternoon. By contrast, market leader Amazon Web Services only came up a handful of times during the Amazon call with analysts, which makes some sense given that AWS is already a well-understood component of Amazons overall business.

For Microsoft watchers, this shift is a little newer. The company still doesnt break out revenue for Azure (come on, folks, its about time) but said Azure revenue nearly doubled compared to last year, and CEO Satya Nadella was peppered with questions about Azure and cloud growth in general.

Heres a few of his answers, courtesy of a transcript from Seeking Alpha:

On the evolution of the cloud: For example, right when everyones talking about the cloud, the most interesting part is the edge of the cloud. Whether its IoT, whether its the auto industry, whether its whats happening in retail, essentially compute is going where the data gets generated, and increasingly data is getting generated at the volumes in which its drawing compute to it, which is the edge.

On cloud holdouts: But we do have a huge on-premise base. There is still a need for those on-premise products. That will continue, but our focus is on transitioning to the cloud.

On short-term thinking: These are generational opportunities that whats at play when it comes to the Intelligent Cloud or whats happening in augmented reality. Either one of those things, I think if we started viewing it quarter to quarter or year to year, well completely miss the trend.

But I completely understand that all of you measure us to what we have done for you lately. And thats a fine way and well keep account of it, but thats not how it works.

On enterprises moving to the cloud: its not about in fact taking any old workload per se, but its about reimagining what they want to do across these. And in that context, of course, theyre lifting and shifting some of the older workloads, but theyre modernizing the entire business process flow. And thats whats I think (is) the killer opportunity, not any one technology, but the entire flow.

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